The D&O Diary has been following the evolving litigation and management liability issues arising from the Trump Administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, the subsequent judicial decisions invalidating those tariffs, and the wave of refund litigation that has followed. As these developments have unfolded, tariff-related litigation has expanded beyond refund actions and shareholder claims to include consumer lawsuits alleging that companies improperly passed tariff costs on to customers.
One recent example is the litigation filed against Levi Strauss & Co. (Levi’s) in California and Louisiana. The allegations against Levi’s reflect the continued filing of tariff-related claims at a time when the scope and applicability of U.S. tariffs remain in flux. Although the tariffs imposed under IEEPA were invalidated by the Supreme Court, other tariffs and tariff-related trade measures remain in effect, including recent U.S. tariffs on Canadian imports and Canada’s corresponding countermeasures. These continuing trade actions demonstrate how rapidly changing tariff policies can create significant challenges for corporate governance, disclosure practices, and risk management.
The discussion below examines the allegations against Levi’s, as well as the potential impact of tariff-related business decisions on D&O exposure.
The Levi’s Litigation
On June 18, 2026, plaintiffs filed a putative class action in the United States District Court for the Northern District of California, alleging that Levi’s increased consumer prices to pass through costs associated with the IEEPA tariffs and now stands to receive a “double recovery” by retaining higher prices while also seeking refunds of the invalidated tariffs. The California complaint asserts claims for unjust enrichment, violations of California’s Unfair Competition Law and the Consumers Legal Remedies Act.
The similar putative class action filed in August against Levi’s in the United States District Court for the Eastern District of Louisiana also alleges that Levi’s incorporated IEEPA-related tariff costs into the prices paid by consumers. The complaint further alleges that, following the Supreme Court’s decision in Learning Resources, Levi’s retained the benefit of those tariff-related price increases while remaining eligible to pursue governmental refunds of the duties it paid. The Louisiana complaint asserts claims for unjust enrichment, enrichment without cause under Louisiana law, and violations of the Louisiana Unfair Trade Practices and Consumer Protection Law.
In both complaints, the plaintiffs are seeking restitution, disgorgement, compensatory damages, attorneys’ fees, and class certification.
Discussion
The lawsuits against Levi’s add to the growing number of consumer class actions seeking to capitalize on the refund process that followed the invalidation of the IEEPA tariffs. Similar lawsuits have already been filed against a number of companies, including Fabletics, Costco, Sony Interactive Entertainment, Microsoft, Nike, Lululemon, Five Below, Stanley Black & Decker, Amazon, Pitney Bowes, and Nintendo. In each case, plaintiffs contend that companies passed tariff costs on to consumers through higher prices while also seeking to retain any resulting government tariff refunds. The theory effectively seeks to prevent what plaintiffs characterize as a “double recovery.”
The Levi’s litigation underscores that, despite the Supreme Court’s ruling, tariff-related exposures have not disappeared. Although the Supreme Court invalidated the tariffs imposed under IEEPA, tariff-related risks remain a significant concern for many businesses. As D&O Diary readers may recall, the Learning Resources decision was limited to IEEPA tariffs and did not affect tariffs imposed under other statutory authorities. Moreover, ongoing trade disputes, including the recent exchange of tariffs and countermeasures between the United States and Canada, continue to create pricing, sourcing, supply-chain, and disclosure challenges for companies.
The litigation is also a reminder that business decisions made during the IEEPA tariff period may continue to face scrutiny. Many companies adjusted pricing, sourcing, and supply-chain strategies in response to increased tariff costs, while publicly discussing the impact of tariffs on profitability and consumer demand. Plaintiffs now seek to challenge those decisions after the fact, arguing that consumers who absorbed tariff-related price increases should share in any refunds companies receive following the invalidation of the tariffs.
Although the specific risks vary depending on a company’s ownership structure, tariff-related litigation and refund disputes may create D&O exposure for both public and private companies.
For public companies, D&O risk may arise not from the underlying consumer class actions themselves, which generally would not constitute “Securities Claims” under a D&O policy, but from potential follow-on shareholder litigation. Questions could arise regarding disclosures about tariff-related pricing decisions, the anticipated impact of tariff refunds, or the financial consequences of the Learning Resources ruling. If tariff recoveries are material, investors may scrutinize disclosures concerning the expected value of those refunds and management’s plans for handling them. In addition, tariff-related litigation and any resulting financial or reputational impact could trigger shareholder claims challenging management’s oversight and disclosure practices.
Another area to watch is how companies account for and disclose potential tariff recoveries. For some companies, anticipated refunds may be material, raising questions regarding earnings guidance, reserve practices, financial reporting, and public disclosures concerning the likelihood and amount of any recovery. Post-event litigation waves may lead to disputes over underlying business decisions, giving way to scrutiny of what management disclosed about its expected financial consequences.
For private companies, the financial impact from tariff-related consumer lawsuits may be more immediate. As we have previously noted, shifting trade policies and tariff-related business decisions can transform what initially appear to be operational challenges into management liability concerns. Companies that have adjusted pricing, sourcing, or supply-chain strategies in response to tariffs may now find those decisions subject to heightened scrutiny, as a growing number of consumer lawsuits seek to challenge the business judgments made during the tariff period. Although consumer class actions may not fall squarely within the core coverage grant of a private company management liability policy, they can generate significant defense costs and create circumstances that could later give rise to covered claims.
Whether the plaintiffs’ theory against Levi’s and similarly situated consumer brands ultimately succeeds remains uncertain. Nevertheless, the growing number of filings suggests that the plaintiffs’ bar views tariff-refund litigation as an attractive avenue for recovery. Thus, the continued filing of “double recovery” lawsuits illustrates how business decisions made in response to tariffs may continue to generate litigation, disclosure, and D&O risks long after the underlying tariffs have been invalidated.